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Free Shipping, Ease of use to Boost Holiday E-Commerce Sales

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Apparently, retailers’ extensive prep work – including shoring up their fulfillment and shipping processes – will pay off in online sales.

Holiday e-commerce sales are expected to soar 15 percent this year to $78.7 billion, according to numbers released this week by Forrester Research. The Forrester projection is somewhat in line with other researchers’ estimates:  EMarketer also projects that U.S. holiday e-retail sales will increase 15.1% this year, while Deloitte LLP predicts a 12.5 percent to 13 percent increase in U.S. non-store sales, which primarily consists of online sales.

“Strong economic growth and low unemployment rates project a healthy playing field for online holiday sales and outweigh any lingering dampening effect of the government shutdown,” the Forrester report stated. “This strength is even more evident online than it is offline, as consumers continue to shift their spending to multiple digital devices from stores.”

More consumers are shopping online this year because, essentially, they believe the process is cheaper and easier. 61% of U.S. consumers surveyed by Forrester said they shop online because it is easier than going to stores.

As we have discussed here previously, free or inexpensive shipping is not hurting e-commerce sales either. 50 percent of shoppers said they would consider buying from an internet retailer they have never purchased from before if they offer free shipping or the lowest shipping costs.

In addition, 51 percent said they will buy from a new e-tailer when they offer lower prices than other retailers and 42 percent consider new retailers when they offer the “best deals”, which includes coupons and promotions.

Online retailers’ reputations also play a factor in consumers’ choice to buy from them. 39 percent said they will purchase products from new e-tailers that are well-known and have a good reputation and 39 percent said they will buy from those that offer free returns by mail.

Another factor driving e-commerce sales this holiday season is the significant growth of shopping via mobile devices. Forrester projects that 186 million U.S. consumers will own smartphones by the end of the holidays, and 87 million will own tablets.

“In the 2013 holiday season, mobile’s biggest impact will be facilitating cross-channel experiences, as consumers are more likely to use mobile devices to research a product and read customer reviews than to actually make purchases on their devices,” the report said.

We believe that many more shoppers than projected will be using mobile for more than just research. The major brick-and-mortar and online retailers have just made it so easy – with improved functionality on their web sites and mobile apps – for consumers to place orders via their smartphones and tablets.

We think that analysts and research firms will end up being surprised by the huge number of mobile orders that are fulfilled this holiday season. Do you agree?